The New York herald., 1872-12-11
THE THREE CONSULTING ACTyARgEs RECON-
MEND Low RATES.


These "unhesitating" expressions from three ac-
tuaries Of some notoriety would hardly have re-
ceived much attention had the public been familiar
with their previously expressed and equally sun
hesitatng' and unqualified" opinions.
The New York DailD bulletin has taken the
trouble to examine this question of low reduced
rates, and shows that the very Actuaries who now
so "unhesitatingly" oppose and "unqualifedy dis
approve" them but very short while ago strongly
urged them. The following extracts from opinions
OF Messrs Wright, Homans and Facker will puzzle
the public which will inquire what is the difference
between consulting Actuaries" and Consulting"
weatherc0cks.
Elizur Wright. speaking of the advantages of low
rates to policy holders, says:-
1t is marvellous how little 1t is considered that the
more you pay in advance the more you insure your
self! the more you have to pay beyond your Just
share OF the expenses.
Sheppard Homans, by letter dated March "a, 1871,
officially states 10 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 a de-
cided advantage, and Is itself pledge to the pol
Icy holders OF economy and care in the manage
ment.
Elizur Wright. by letter dated February 81, 1871,
said, in his Official capacity, that 'in view of the
tendency which mutual companies have shown TO
exact large premiums without making cOrre
spondingly large return OF the surplus, on account
of extrayagant expenses, 1t is important to have
stock companies with low rates."
"Actuary D. p. Facker in a letter dated May 2,
1871 officially stated that the competition of stock
dow rates. companies win have wholesome ten
dency to check extravagant management in the
mutuals whose large premiums may tempt them
into unnecessary expenditures"
These .'unhesitatingr and unqualified" opinions
in favor of low rates would haye abandantyy - ;S;stl
ieds the Mutu.I,'s course, and may possibly have
-suss.-soa -, cspeOias'S when they are taken In
connection with similar opinions from other equally
eminent, but, so far as now appears more con-
sistent insurance authorities. For instance, the
Hon. w. Barnes, in his Insurance Report for 1861,
wrote:-
The cheapest rates OF premium consistent with
entire and perfect safety to the insured best SUBJ
serve the public interests and operate to extend
the benefits OF these benefcent institutions. IL Is
needless and expensive to pay over money or
notes to a life insurance company for the purpose
only OF having the same returned.-Hon. w.
Barnes Report, 1861.
The Hon: John +. Sanford Insurance Commits
sioner Of Mass,achnsetts, IN his report for 1868,
says:-"The sooner such guarantees cease to be
made and such expectations created the sooner
and insure their lives for security and not for
dvidenH. The best and most popular companies
win then be those That promise only equity and
security with the most upright and judiclous man.
agement"
Emerson W. Peet, actuary wrOte:-
The object of every insurer should be TO secure
at once as large an amount OF insurance as he can
for given payment; and he who resorts to an
ollcc exaeting high premiums sacrifices the inter-
ests Of his family for benefits only prospective and
contingent and surrenders certain and liked
advantage for share in the lottery OF dividends,
in the adjustment Of which he has no control, and
the correctness Of which lie has no means OF ascer
tanning.
To the opinions thus so plainly held by high
authOritiesin life insurance, and with which but o
short time ago the three "ConsultingA ctuaries."
agreed, we will add still from the D1Gv BuHctisa
the followiig:-
Vice Prelident Sprague, of the 'Institute OF
that 'the life insurance legislation in the United
States certiny has had the effect OF checking the
with the hkh rates OF interest prevailing there,
and almost certain to prevail for many years to
come, the rites Of premium ought certainly to be
reduced"
Nor can it,e said that Messrs. Barnes, Sanford
Ezur Wright, Sheppard Homans and Fackler were
alone in holding the belief that the rates of life in
surance coud safely be and ought to be reduced
The matter was discussed, as its Importance de.
served, by responsible journals. For instance, the
New York Tines, which has long paid great and
intelligent attention to insurance questions,
wrote, December TO- 1869, in Its editorial col
umns:-
Their (the life insurance companiesD rates OF
too costly bsiness. Instead OF exacting heavy
premiums, y order that they may make display
Of Ats tney m oad bring s rate
In Neg YorkDanv Times, December, 1s, ls60
The Insrrdsce spectator, as early as December,
1869, said tha 'the principle OF high reserve (re- |
quiring high atcsl, more than anything else, per-
mits extrsvaance, upon the same principle that a
man Is wasta OF his money Just IN the proportion |
n ha
actually need.v
the baltinre Underwrfter, in January, 1871,
heavily loade premiums, in the case OF the down
fall OF the Grat western and OF the reckless ex-
to the verge the cataract, instead Of reverting
to the insure in the form OF dividends, has only |
proved an irresistible temptation to prodigality |
And fnallythe New York Times said editorially
again. Januar Z, 1s7O:--
The abiityof a company to declare large
"prohts" is cutingent upon the payment OF an
excess OF preli,nm by the insured. Va,
as we have sal because the insured pay more for
insurance thant Is worth. The premiums are too
high. Bring tese down to the proper rate, and
the era or bigdivdends and "prohts"-and ex-
travagant COMMISSIONS into the bargaIn-will come
to an end.-Ntoridl IN NeU York Daily Times,
January =, 1916
This array OF uthorities exclusive of the three
consulting Auaries'y would seem to be SUI
1cient to justly completely the Mutual in its
course. That, least, no one will deny. But what |
will the public ink of the opinions, hereafter, OF
such "Consulty Actuares' as are here shown |
astradde OF a ,ry painful fenceS In the words
with which Dr. ,hnson begins the story OF Ras-
selas, aye who stem with credulity to the whis-
pers OF fancy al pursue with eagerness the phan-
toms OF hope,"nd who believe that the facts OF
to-day will be u facts OF tomorrow, listen to this
tale of Wright, omans and Fackler, the "C0nsult.
ing Actuaries'' the eighteen life insurance CON-
panies, P0LICY.H0InER,