St. Paul daily globe., 1888-06-25

fit Associates of Rochester VS.. William
ID. ROSS-Lewin, in decision of the SUI
| preme court of the state of New York.
That association was incorporated under
| chapter 267 of the Laws of 1875, section
| 8, which provides that,
1.-The membership of any person in
said society or corporation shall be
determined by his death, or by his
voluntary withdrawal therefrom, or
by expulsion therefrom; and the man
ner of such withdrawal or expulsion
OF members shall be determined and
provided by the bylaws of said corpor-
ation.''
The bylaws of the association deter
mneds that, if any member should neg
leet 10 pay any dues or assessments,
then and in such case such membership
should cease at once without notice and
all claims be forfeited to the association !;
itawas
''Held, that the neglect to pay an as
sessment for thirty days after notice
thereof, ipso facto, determined the
membership of the delinquent.
THAT he was liable for the amount
OF all assessments previously made. and
also for all losses happening prior to
the time when he ceased to be mem
Der. though no assessment therefor had
| been made.
| "That receiver of the company, ap-
| pointed in an action brought by tine peo-
| pie to procure it's dissolution, might as
sess the members for unassessed losses
and bring separate actions against each
member to recover the assessments so
made against him.
| ''That. as the plaintiff had been duly
appointed receiver, his title to the
assets OF the company, including the
liability of the defendant to make good
the losses by the payment of proper as
seSsments. could not be questioned by
| the defendant"
| From the foregoing it appears that
the holder of certificate in a co-opera-
tive company is not released from liabil-
| ity should he cease to be member by
| the nOn-payment of an assessment
when due, but he is liable, and his
estate is liable, for all losses by death
which may have occurred during the
| period of his membership, whether as
sessments have been made for the same
| or not. Surely such contingent liabil-
| ity was never dreamed of when he
signed the contract.
| AS high authority as the above says
| On the same subject. and it is word
| of warning to the farmers:
Assessment insurance is doomed to
| certain failure for the simple reason
| that it ignores the immutability of the
| law OF average upon which all sound
life insurance is based), and undertakes
to perform lmpOSSibilities. In. mathe-
| matlcs there are certain propositions
laid down which are called aXioms, or
self-evident truths. They are simply
undenlable truths. and a mathematician
who would undertake to set any of
them aside, would be considered fool
| The principles which form the founda-
| ton for all sound life insurance also
| contain some self-evident truths which
| a person might as we'll undertake to
diSprOve as that two and two make
four. Yet the advocates of assessment
| insurance wish you to believe that two
and two will make twenty, or what is
equally absurd, when they tell you that
members assessment can never eX-
| ceed $40 for death benefit of $4,000. A
mathematical absurdity!
Suppose, for instance, that 1000 per-
sons at an average age of thirty years
| form themselves into a mutual assess
| ment society. each insured for 50, 600.
| ltis quite evident that there will be
1,eO0 policies in force of s., 600 each, or
! sum total of S2, ,000,0 900 of So-called insur-
| ance at risk. In order to pay this total
amount it becomes absolutely necessary
that So, 600, 900 be obtained from some
| source, as there is no other revenue in
| assessment societies. it must necessarily
be collected from the members, conse-
quently it will cost each member, on an
average, $4,000 for their insurance. 1t
Will cost those who die early less than
$1,000, and those who die late very
| much more.
1t is plain that as the average age of
the society increases, the death rate
must also increase. There are fewer
members left to pay, necessarily the as
sessments are, larger. tits claimed that
this difficulty rs overcome by taking in
new and younger members, Or the in
fusion of new blood, thus keeping the
average age, and consequently the death
rate, down to low figure. This is the
! principal argument used by the advo-
Gates of assessment insurance societies
when they are questioned ON the SUBJ
ject. and. at first thought, most rea-
sOnable one it appears to be, yet its ut
ter fallacy can be easily shown.
Say, for example, that a society is
composed of 100000 members whose av-
erage age equals thirty-five. years, the
number of deaths during the first year
will be 895, leaving 99,1O5 survivors,
each one year older. Now, in order to
reduce the average age to thirty-five
years, and thus have the death rate no
greater than S95 per 100, 600, an addition
of SO, los new members averaging thirty
four years of age, becomes necessary,
or 1858 at age thirty three; or 33,O35 at
age thirty-twO; or 24,776 at age thirty
one; or 1881 at age thirty. AS will be
seen this increase must go on with rapid
progression from year to year, until at
the beginning of the tenth year from
1856 new members at thirty years OF
age, up to 23,610 994 at thirty-fOur wears
down. The average life of all assessment
societies is only five years. What sane
man, who expects to live more than five
years, would join a society that must
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