The midland journal., 1945-04-06
American Life Insurance Celebrates It's tooth
Anniversary by Adopting a New Actuarial Table
Which Reflects Longer Life Of Modern Citizen
BY ELMO SCOTT WATSON
Released by western Newspaper union.

1NE GGN IOTLy-uVS lIIuS
IN American life insurance
observing its Tooth anniversary
and by way of celebration it's
beginning to operate under q
set of actuarial tables. Until this
year insurance companies have
been booking" life and death
chances on the same basis as
they were figured when the first
American ''life" policies were
written away back in 1845. But
this year they are discarding the
old "odds table" and putting into
effect a new one and that's a
matter of prime Importance to
more than 70, 900, 900 Americans
who own more than 125 billion
dollars worth of life insurance.
AS a matter of fact, the adoption
Of the new actuarial tables in
American life insurance's centennial
year is accidental and coincidental,
rather than purposely planned. Nine
years ago state insurance commits
sioners and mathematical wizards Of
the insurance companies recognized
the fact that the tremendous i'm
provements in medical science had
made the old "odds table" obsolete.
In the light of modern methods Of
prolonging human existence, new
set of life expectancy standards was
needed.
But figuring out these standards
and fitting them to rates-or fit
ting rates to them-wasn't simple
matter. For instance, they knew that
you-if you are 30 years old-have a
far better chance of living beyond
that age than you did two decades
ago. It was only few decades ago
that eight out of every thousand
people died at that age. Today,
thanks to more public enlightenment
on medical matters and improve
ments in diet (inc1uding more
knowledge of vitarnin requirements)
only two or three persons per thou
sand are dead at the age Of 80.
hatcS ADOub tu6 Sdmes
But even though the improve
ment in our life chances seemed to
indicate much reduced rates, this
was offset over the years by the de-
terioration of our interest rates and
the increased cost of doing business.
The problem of adjustment was
threefold: (D rates according to
improved life probability; (2) COM
pany income according to lowered
return on investments; and (3) COM
pany expenses as compared to ''the
good old days" when breakfast cost
a nickel and the company president
drew a salary Of $50 per week.
The insurance commissioners had
a major mathematical problem be-
fore them. For the latter two points
lowered earnings on invested
funds and sharply rising costs Of
doing business - more than COW
cred the slight break they showed
on their books because the doctors
were keeping US alive longer.
Nevertheless they went ahead. Al
fred N. Guertin of New Jersey, was
made chairman Of a commission
ers group to recommend the new
"life" tables. Five other state COM
missioners sat with him. John S.
Thompson, mathematician and vice
president of the Mutual Benefit Life
Insurance company Of Newark, NJ.
was a committee member represent
ing the Actuarial Society Of
America.
Sixteen states enacted the So
called "Guertin law" which means
that the insurance companies doing
business in those states can in 1945
adopt the recommendation Of the
Guertin committee into their future
policies. The law became effective
January / of this year on an optional
basis but it becomes mandatory
after three years, in December, 1948.
How 1t All Began.
Centuries before Messrs. Guertin
and associates took on their her.
culean job, a Roman named Ulpi-
anus devised an "odds table" for a
few of his friends. Ulpianus was a
lawyer with a fair for figures. AS
matter of fact, his life expectancy
charts were so good that they re-
manned unchallenged from 220 A. D.
for almost is centuries. Even as
late as 1914, the Tuscan government
used his figures.
Not content with Lawyer Ulpianus'
findings, however, Edmund HALEY,
known as the English astronomer
who discovered the famous Halley's
comet, undertook the job Of comput-
ing modern mortality tables in
1893. His method was the basis for,
present-day computations; namely
that Of using accurate vital Stats
tics. HALEY selected the city Of Bres-
lau you've been reading about it in
the war news from Silesia) for his
guinea pig from 1892 observing
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