New-York tribune., 1872-12-11
THE THREE CONSULTING ACTUARIES RE-
. COMMEND Low RATES.


BOru SIDES or The FENCE.
To ihs EditOr or The Tribune.
SIR: Some days ago. Messrs. Elizur Wright,
Sheppard. Homans and ID. r Facker, who call them
selves Consulting Actuaries," in answer to letter
from eighteen Life Insurance Companies, gave 1t as
their united. "unhesitang, and deliberate opinion, that
tho new rcdnced rates Of Life Insurance, proposed by
the Mutual Life Company OF New-York. were 'nwise,
deficient in security. and deserving OF an un-
qualified disapprova'"
These unhcsitating" expressions from three aetu-
aries Of some nOonety. would hardly have received
much attention had the public been familiar with their
previously expressed and equally unhesitating" and
"unqualifed" opinions.
The Neo York Daily Butets has taken the trouble to
examine this question OF low reduced rates. and
shows that the very Actuaries who now 80 unhesi-
tatingly" oppose and "unquaaedly disapprove them
but very short while ago strongly urged them. The
following extracts from opinions OF Messrs Wright Ho-
mans and FackleP will puzzle the public, which VIII in
quire what the difference between "COnsuting Actu-
aries and " Consulting" weahereOcks.
Ezur Wright, speaking OF the advantages OF low rates
to the polcy-holders, says
1t j. marvellous how LITTLE t Is considered that the
more you pay in advance. the more YOU insure yOurst
the YOU have to beyond your just share of the
expenses"
Sheppard Uomans, by letter dated March 81, 1871,
officially Estates TO then recently organized mutual
company with rates reduced fully equal to those now
proposed by the Mutual, that
'The feature OF low rates OF premium has decided
advantage, aud is itself pledge 10 the poicyhodeTs oi
economy aud care IN the management"
Ezr Wright, by letter dated Feb. 81, 1871 said In his
official capacity. that in view Of the tendency which
mutual companies shown exact large premiums
without making correspondngly large return OF the
surplus account of eXtravagant expenses, IL Is I'M
portant TO have stock companies wthllow rates"
Actuary D. p Facker, in letter dated May O. 1871,
otrcaly states that the competition OF stock (l0w
rates. companies will bave wholesome tendency to
check extravagapt cement In the mutals, whose
large premiums may tempt them into unnecessary ex-
penditures."
These "untesitating" and "unqualifed opinions IN
favor Of low rates would have abundanty justified the
Muuals course and may possibly have suggested 1t;
especially when they taken in connection with sim
liar opinions from other equally eminent but SO far as
now appears consistent insurance authorities.
For instance the Hon. w. Barnes, u his Insurance Be
port for 1861, wrote:
"The cheapest rates Of premium consistent rt entire
and perct surety the iSred best subserre The Pudtic
interests and operate to erteld ne 6es OF ese oeh
money or notes 10 Life Insurance Company foT he Pu
pose only Of hdrt"g the sane rs"rnea ooo-+ ,sc,
The Hon John T. Sanford, Insurance Commissioner OF
Massachusetts, in his Report for 1868 speaking OF dly
deuds in LIE Insurance companies says: ine sogneT
such guarantees 10 be made and such expectations
creatsd Me sooner Ls Insurance ,eH come 70 res on as
fyue pOiire and insure their tires FOR Secu1ty anu
not FOR dirdends The best and most popular companies
mW be those hat Ponss, oy e{ty ea re@der ,c ss g
most upright and judtcio"S management
Emerson W. Peet, actuary, wrote;
"The object OF every insurer should be- 70 secure at
given pay ment and he who resorts 10 an office exacnS
high premiums sacrluces te hteIos,s VI nS d ,y 1
ders a certain and fixed advantage for snare IN the
lottery of dividends in the adjustment OF which he has
no control and the correctness Of which he has no means
| Of asecrtalning"
To the opinions thus SO plainly held by high authOri
ties in Lie Insurance and with which bat short tme
| ago the three Consulting Actuaries" agreed. will
! add, sull from The Daily Bulletin, the following
"yce President sprague, OF the Institute of Actul
ries standard authority in Europe, said that the life
insurance legislation IN the Uuited States certainly has
had tins effect OF checking improvements there for there
can be no doubt, with tine high rates of interest pre-
vailng there, aud almost certain to prevail Tor many
years come the rates of premium ought certainly to
| be reduced "
Nor can it be said Barnes Sanford, Elzur
Wright, Sheppard Homans, and Facker, were alone In
holding belief that the rates Of life insurance. could
safely be and ought bo reduced The matter dis
cussed as its Importance deserved by responsible Jour-
nails For instance The NeEIork Times, wrote, Dec l6,
| lsC9 in its editorial columns:
Their (the Life Insurance COmpanies) rates Of pre-
Mum need rerision. They make insurance too eoSD
business Instead NJ eIncluig hedrg premiums, Ia order
that tey may make display OF "prQfts returned hey
should bring tie rde nearer e actual cost Of insurance.
The Insurance Spectator. as early as December, 1869.
said that tine principle OF high requring high
upon the principle that man Is wasteful OF his
Just in the proportion that the amount at his dis
| posal IL beyond what he actually needs"
The Baltimore UnderUriter In January, 1871, said that
"the excess Of Overcacuated and heavily loaded pre-
mums, the Of the downfall Of the Great Western
and OF the reckless extravaganza which Is rapidly hr
ing others to the verge OF the cataract instead
only proved Irresistible temptation to prodigy and
waste"
| And, finally, The Sev-Y0rk Times said, edItorialy
| again. Jan. z, 1870:
"TAe ability Of Company 10 declare large profits is
contingent uo e payment Of an eress 0f premium 6y
| ne insured II Hereafter large diridends are de
ciared IL tciN BE- hare Sdid because e insured pay
more for insurance than IL IS r0Fth. Tie premiums
high. Bring eso down 10 the proper rate and The era
OF biz dridsnds and 'prodts'tDs erirdrdgant
| siOns into tie bGrgail--iclH come 10 an end"
array Of authorities exclusive OF the three Con-
sutHg Acuarles1 would seem to be sufficient to JUSTIFY
completely the Mutual in its That, at least,
one will deny But what will the pubic think Of the
opinions hereafter of such Consulting Actlaros" rs
are here shown asraddle Of very painful fcncei In
the words with which Dr. johnson begins the story OF
Rasselas Ye who listen with credulty TO tue whispers
OF fancy and pursue with eagerness the phantoms or
hope" and who believe that the facts Of to-day will
be the facts tomorrow listen TO this tale NJ Wright
Homans and Fsckler tho Consulting Actiares OF The
Eighteen Life Insurance Com panies. PoiIGrEoIDkR.
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OUR PROPOSED CRYSTAL PALACE.