Cornelius Walford.

The insurance cyclopeadia: being a dictionary of the definitions of terms used in connexion with the theory and practice of insurance in all its branches: a biographical summary ... a bibliographical repertory of all works written upon the subject ... an historical treasury of events and circumstanc online

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Online LibraryCornelius WalfordThe insurance cyclopeadia: being a dictionary of the definitions of terms used in connexion with the theory and practice of insurance in all its branches: a biographical summary ... a bibliographical repertory of all works written upon the subject ... an historical treasury of events and circumstanc → online text (page 64 of 157)
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that to such a degree as to make a difference generally of more than a whole year tn the mean,
duration of life at every age, and at some ages twice as much.



266 DEPARCIEUX'S MORT. TABLE.

In the 5th Rep. of Reg. -Gen., pub 1843, it is stated (p. 17) that the Northampton T.
" ought not to have been pub. after the appearance of the admirable Essay and T. of
Deparcieux in 1746." We have seen how Dr. Pxice treated the matter, under date
1783 in this art.

Mr. A. G. Finlaison, in his Rep. and Ohs. on the Alort. of Gov. Annuitants, i860,
follovired up the subject :

The Frencli tontine nominees of i68g and i6g6 would seem to offer a complete parallel to those of the
English tontine of 1789, a century later. But there is the unfortunate circumstance that the sexes are
not distinguished in Deparcieux's obs. of the tontine ; and it is impossible to tell in what relative pro-
portions they were present in the tontine lists. The experience — notwithstanding the omission of the
distinctions of sex — was afterwards worked up into extensive joint-life annuity T. by the late Baron
Maseres.

Again :

"With regard to the religious persons : Deparcieux fortunately computed the law of mort. for each
sex. . . . Reasoning from general circumstances, it might perhaps be thought that the untroubled
conventional life of persons living in France 130 years ago, would present a not unapt case for com-
parison with the life annuitant of the present day. The result of 'any such comparison, however, will
tend to show that the vitality of the monks and nuns was much inferior to the vitality not only of the
life annuitant of the present day, but also to that of the French tontine annuitant of Deparcieux's
time. . . . As the mean duration of life among the nuns, although superior to that of the monks, is
nevertheless inferior to the expec. of life possessed by the tontine nominees, among whom were
included a vast proportion of males, it is only reasonable to suppose that the rule of conventional life
largely influenced the result. [Mortality Tables.]

DEPARTURE of Ship. — The time of saihng, in most voyages, is so material that in many
pol. there is a warranty to sail on or before a given day. Independently of the effect
which a difference of seasons may have upon the risk, and of the necessity there is
that the voyage shall end in a reasonable time, it is of great importance to the insurer,
where the pol. is "at and from" a place, that there be a day fixed for the ship's departure,
in order that duration of the risk at the place may be ascertained. This, like every other
warranty, must be understood according to the commercial import of it, and must be
strictly performed. — Marshall, 5th ed., 1S65.

The question of departure presents itself in several other forms.

The Ins. Ordin. of France, 1681, says : "If the voyage be entirely broken before the
departure of the ship by the act of the insured, the ins. shall be annulled, and the insurers
return the prem., reservin-g an half p. c." Valin, in his famous Comtnentanyxi.'^ov^ this Ordin.,
says:

Here is an advantage which the insured has over the insurer : as soon as the pol. is signed, the
insurer cannot go back from it and disengage himself without the consent of the insured ; in reality
neither can the insured desist from the ins. against the will of the insurer ; but what he hath not the
power of doing directly, he may do indirectly^ eith'er in breaking up the voyagje before the departure
of the ship, or not putting any goods on board. If, however, the goods be shipped, and the ship got
under sail, the insured is then as firmly bound as the insurer.

The Ordin. of Rotterdam, 1721, says:

Ships and goods already departed may be assured, provided that circumstance and the time of the
departure be mentioned in the pol. ; unless the insured be ignorant thereof: in which case, however,
it must be expressed in the pol. that the insured had no knowledge thereof. And the assurers shall also
be permitted to prove that the assured had knowledge thereof. ^ "Which this appearing, the assured
shall not only have no action against the assurer, but shall besides be liable to pay him double prem.
over and above the charges of procuring the proofs. And notwithstanding this the officer shall have
power to proceed against the assured as a deceiver.

The Ordin of Stockholm, 1 750, says :

If a ship or goods be delayed in the loading beyond the time mentioned in the pol., so that it does
not depart till a later season of the year, when the dangers of the sea are greater, the insured is of this
to inform the insurer, who, as he runs a greater hazard, is entitled to such an add. to the first prem. as
was current at the time of the ship's departure.

DEPONENT (from the Latin depono, to pay down).^ — A person who makes an affidavit; a

witness ; one who gives his testimony in a Court of Justice.
DEPORTATION.— Transportation; exile into a remote part of the kingdom, with prohibition

to change the place of residence ; exile, an abjuration, which is a deportation for ever

into a foreign land, was anciently with us a civil death. — Ayliffe.
DEPOSIT. — Money lodged with a person or asso. as an earnest or security for the perform-
ance of some contract,
DEPOSIT Account. — A sum lodged with a bank, or other monetary asso., with fixed

specified terms as to rate of int. and notice required for withdrawal of whole or part of the

deposit.
DEPOSIT Assn. Co. — An asso. under this title was founded in Aberdeen in 1846. It

appears never to have got into working order.
DEPOSIT Assu. AND Discount Bank. — A co. under this title vi^as regis, in 1855. It

afterwards became the Life Assu. Treasury, under which title we shall deal with its hist.
DEPOSIT AND General Life Ins. Co. — Founded in 1852, with an authorized cap. of

;^ioo,ooo, in shares of ^5, of which but a comparatively small amount was at first

bond fide subs. The regis, showed a subs, of ;i£'75,ooo. The prosp. said :

The fact of the enormous accumulations of the savings of the industrial classes of the community in
benefit SOS., savings banks, and other modes, has induced the promoters of this Co. to consider
whether some of such savings could not be better invested in the way of L. assu. The result of that
consideration has been the estab., under the auspices of a most eminent Act., of the Deposit and Gen.,



DEPOSIT AND GENERAL LIFE INS. CO. 267

. . . combining with an ordin. L. assu. bus. some of the valuable uses of such inst., and thus to
afford increased advantages to the provident classes to secure the fruits of their industry. . . .

Amongst the various modiiications of L. assu., perhaps not one is so likely to conduce to the good of
the provident classes as that of deposit — a plan which has been adopted and is now in prosperous
operation in Scotland.

By this plan the payment of any sum from ;^i upwards will purchase an unforfeitable and completely
paid-up pol. for a sum payable on death proportionate to the money deposited, having regard to the
age of the depositor.

The depositor may at anytime borrow or receive back any part of the deposit, or add to it— the sum
assured being regulated accordingly ; or he may withdraw the whole deposit, and so put an end to the
assurance.

The Co. desire to point out in what respects investment in the way of assu. differs from the system
of saving in savings banks and F. sos. It is in the first place obvious that a great advantage is pro-
duced by the circumstance of the money saved with this Co. being returned at death, with the great
increase which the principle of assu. involves. Other benefits are afforded by the opportunity of
having the savings back for use during life, according to the various wants of the assured, upon, terms
so well calculated to induce a renewal of the saving when circumstances permit.

The insured were to consist of two classes : — "i. The deposit L. assu. class, which will
be entitled to the sum assured by the money actually in deposit at death, and to all
advantages of the deposit system explained above, together with a share in the profits."
2 The ordin. L. assu. class, . . ." with parti, or non-parti, rates. Regarding the
profits : Ten-twentieths (one-half) to pol.-holders, to be applied in either of the three ordin,
methods, or by way "of annu. or endow." Two-twentieths asa fund for "the relief of
distressed shareholders, depositors to the extent of £^, and L. assurers who may have
paid 5 years' prem., or of their widows and orphans." Three-twentieths, "together with
such portion of the funds of the Co. for the purpose as the directors may determine, to
form a reserved accumulating fund until the account thereof shall be sufficient to pay off
and purchase up the cap. or shares of the proprietary at the then market price, after which
the Co. shall be declared and constituted a mut. assu. co., when all the profits will be
divided amongst the assured entitled thereto, except one-tenth to be appropriated as a
relief fund." The remaining Five-twentieths among the proprietary, who were to receive
int. at 5 p. c. on their paid-up cap. pending the add. of profits.

Among the ' ' distinctive features " it was set out that "pol. of 5 years' standing not
void on account of suicide" ;-"diseased lives, and Uves 'declined' by other offices, accepted
on equitable terms." Prems. may be payable weekly, fortnightly, monthly, and surrender
values given after 5 years ; and free pol. for amount of surrender value after 7 years.
Pol. "indisputable," by special clause in the deed; "and, to put this matter beyond a
doubt, the common declaration as to the health and habits of the person assured will
not be inserted in the pol."

The deposit T. and the special features of that branch will be given under Deposit Ins.

The prosp. contained some well-known names 1 Sir Charles Price, banker, was one of
the trustees ; Mr. William Prinsep was a director ; Mr. F. G. P. Nelson was Consulting
Act. (and was understood to have been active in the formation of the Co.) ; while Mr. F.
P. F. Strousberg was inspector of agencies ; and Mr. Charles W. Bevan was Sec.

The Co. firom a very early period of its existence showed signs of having entered upon
a troublesome career. By the end of 1853 it was found that the Co. was in debt some
;^9000. A committee was appointed, with Lord Drumlanrig for its chairman. It
reported in effect as follows : The existing difficulties were to be attributed to having
limited the subs. cap. to ;^io,ooo, and having no person on the management who under-
stood L. ins. If ^I0,ooo more were subs., it would not put the Co. in the position it
ought to be, but it would release it from debt. It was resolved that steps be taken to
secure more cap.

In April, 1854, the debts of the Co. amounted to ;^i5,ooo ; the assets were but ;f 500.

In 1854 the Sec, Mr. Bevan, retired. In July, 1855, he was convicted at the Old
Bailey on the charge of having embezzled the funds of the Co. [Bevan, C. W. W.].
Later in the same year actions were brought against shareholders to recover calls. In
such an action against Mr. Ayre the younger, solr., Bristol, Mr. Bevan was called for the
defence. " He was brought up in custody from HoUoway Prison." He said the majority
of the directors had not paid upon their 500 shares. That would appear by the ledger.
The persons who signed the deed were not responsible persons. There were at least
5000 [shares held by?] what we call 'stags' in the City, who received dd. for signing each
share. He knew that of his own knowledge ; but it was not in his time. The shares
actually paid upon amounted to about 8000 or 9000— not 15,000.

Mr. Cracknell, one of the directors, said on the same occasion: — "The directors never
attempted to get the deed signed by men of straw ; as soon as they heard it had been so
signed, they expunged the names. The affairs of the Co. were as prosperous as could be
expected in a young co.. and the directors were gentlemen of station. The debts of the
Co. were nearly all paid."

The affairs of the Co. did not improve. In April, 1856, the auditors of the Co.
prepared a report on the finances, in which was contained the following passage :

From the revenue account it will be seen that there exists a deficiency of income to meet expenses,
and losses amounting to the largo sum of ^^32,841 6j. id., and that no provision has been made for the
current risks under policies amounting to £172,000; and moreover, that by the plan of your Co. a
portion of the prems. already received and expended are liable to be demanded to be returned at any
moment. ... We observe that the sum of ;£i095 gs. lad. has been paid to the proprietors as



268 DEPOSIT AND GENERAL LIFE INS. CO.

dividends ; notwithstanding' that not only has no surplus accrued in any one year since the estab. of
the Co., but, on the contrary, each year has shown a considerable balance against the Co.

Again :

. . . The expenses are considerably in excess of what the income of your Co. will justify. The
shareholders will perceive tbat, leaving altogether out of the account their own capital, which has been
expended, they owe £17,561 8.?. zod., while their total assets of every description amount only to
;^68oo 13J. <,d.y out of which sum £5154 14^. Z^. is unavailable. . . . We give it as our opinion,
that until your Co. have discharged their liabilities, and are in possession of funds to meet their current
risks, they are not justified in issuing any new policies.

The directors withheld this report from the shareholders, and substituted another of a
very different character. Mr. Chatteris, one of the auditors, and a public accountant,
thereupon addressed a letter to the Times [14th April, 1856], in which occurred the
following statement : — " The Co. in question has expended in four years in working
expenses, ;^36,839 ; in dividends to shareholders, ;!^I095 ; in losses and deaths, ;^ii,855 ;
while their whole earnings have been ^^16,968 : they owe to creditors (apart from share-
holders) ;^17, 561, with a banker's balance of ^376. Their pol. risks amount to ;^i72,ooo,
and there is no reserve to meet them."

Shortly afterwards the bus. of the Co. was trans, to the City of Lond,, and the liq. of
the affairs passed into the Court of Chancery, where it still remains. Mr. J. H. Doyle
was appointed Sec, on the retirement of Mr. Bevan.
DEPOSIT By Life. Ins. Asso. — The Life Assu. Cos, Act, 1870 (sec, 3), provides as
follows :

Every co. estab. after the passing of this Act within the U. K., and every co. estab. or to be estab.
out of the U. K. which shall after the passing of this Act commence to carry on the bus. of life assu.
within the XJ. K., shall be required to deposit the sum of ;^ 20,000 with the Accountant-General of the
Court of Chancery, to be invested by him in one of the securities usually accepted by the Court for
the investment of funds placed from time to time under its administration, the co. electing the
particular security and receiving the income therefrom, and the registrar shall not issue a certificate
of incorp, unless' such deposit shall have been made, and the Accountant- General shall return such
deposit to th& CO. so soon as its life assu. fund accumulated out of the prems. shall have amounted to

;^40,0O0.

With characteristic clumsiness, all reference to the mode of payment into Court and
subsequent repayment were omitted, and had to be made the subject of a. fresh enactment.
The 34 & 35 Vict, c 58 (1871), enacts as follows :

Every sum required by the Life Assu. Cos. Act, 1870, to be deposited with the Accountant- General
of the Court of Chancery, shall be paid into the Court of Chancery, and orders with respect to the
payment of such mortey into and out of Court, and the investment and return thereof, and the
payments of the dividends and interest thereof, may be from time to time made, altered and revoked
by the like authority and in the like manner as orders with respect to- the paiyment into and out of
Court, and the investment of other money, and' the application of the dividends and interest thereof.

This Act to be construed as one with Act of 1870.

In the following session (1872) it was found that this second or amending Act required
yet further amendment ; and hence the 35 & 36 Vict. c. 41 — An Act to Amend the
Life Assu. Cos. Acts, 1870 and 1871 — was passed, which enacts as follows :

Whereas by the provisions of the "Life Assu. Cos. Acts, 1870. and 1871," a life assu. co. is
required to pay a sum of money inta the Court of Chancery by way of deposit,, and the certificate of
incorp. of such co. is not to be issued unless, such deposit has been made, and such deposit is to be
returned to the co. as soon as its life assu. fund amounts to the sum therein mentioned ; and doubts
have arisen as to the construction of the said provisions, and it is expediertt to remove such doubts ;
be it therefore enacted as follows :

The said deposit may be made by the subs, of the memc of asso. of th.e co., or any of them, in the
name of the proposed co., and such deposit upon the incorp. of the co. shall be deemed to have been
made by and to be part of the assets oi the said co.

The said deposit shall, until returned to the co., be deemed to form part of the life assu. fund of the
CO., and shall be subject to the provisions of section 4 of the Life Assu. Cos. Act', 1870, according|ly.
The Board of Trade may from time to time make, and when made revoke, alter, or add to, rules with
respect to the payment and repayment of the said deposit, the investment of or dealing with the same,
the deposit of^ stocks or securities in lieu of money, and the payment of the interest or dividends
from time to time accruing due on any such investment, stocks, or securities in respect of such deposit.
Any rules made in pursuance of this section shall have effect as if they were enacted in this Act, and
shall be laid before Pari, within three weeks after they are made, if Pari, be then sitting, or it not,
within three weeks after the beginning of the then next session of Pari.

The Board of Trade, in pursuance of the last-named powers, have made the following
rules with respect to the payment into the Court of Chancery, and repayment of the
deposit required to be made by a L. assu. co,, in pursuance of the provisions of the Life
Assu. Cos. Acts, 1870 and 187 1 ; the investment of the deposit in securities, the deposit
of stocks or securities in lieu of money, and the payment of the interest or dividends from
time to time accruing due on any such stocks or securities.

1. In these rules the terra " the Court " means the High Court of Chancery in England, and the
word " company " means a co. as the same is defined in the second section of the Life Assu. Cos.
Act, 1870,

2. Where any co. is acquired in pursuance of "The Life Assu. Cos. Acts, 1870 to 1872," to deposit
the sum of ^^20,000 with the Accountant-General of the Court of Chancery, the said co., or the subs,
of the memo, of asso. of the said co., or any of them, as the case may be (in these rules referred to
as the promoters), maj^ make application to the Board of Trade for a warrant, and the Board of
Trade may thereupon issue their _ warrant to the promoters for such payment into court, which
warrant shall be a sufficient authority for the co. or persons therein named to pay the money therein
mentioned into the Bank of England, in the name and with the privity of the said Accountant-
General, and for that officer to issue directions to such bank to receive the same, to be placed to his
account there, ex parte the co. mentioned in such warrant, according to the method (prescribed by



DEPOSIT INSURANCE. 269

statute or gMieral rules or orders of Court or otherwise), for the time being in force respecting the
payment of money into the said court, and without fee or reward.

Provided, that in Heu, wholly or in part, of the payment of money, the promoters ma^ bring into
court as a deposit an equivalent sum of bank annuities, or of any stocks, funds, or securities in which
cash under the control of the Court is for the time being permitted to be invested, or of Exchequer
bills (the value thereof being taken at the price at which the promoters originally purchased the same,
as appearing by the broker's certificate of that purchase) ; and in that case the Board of Trade shall
vary their warrant accordingly by directing the transfer or deposit of such amount of stocks, funds,
securities, or Exchequer bills by the persons therein named, into the name or to the account of the
said Accountant- General in trust to attend the orders of the Court, ex parte the co. mentioned in
such warrant.

3. At any time when the office of the Accountant -General of the Court of Chancery is closed, a
deposit under these rules may nevertheless be made, in the manner and subject to the regulations
provided with respect to deposits by cos. by section 88 of the Lands Clauses Consolidation Act, 1845.

4. "Where money is so paid into the Court of Chancery, the Court may, on the application of the co.
or the persons named in the warrant of the Board of Trade, or of the majority or survivors of such
persons, order that the same be invested in such stocks, funds, or securities as the applicants desire
and the Court thinks fit.

5. In the subsequent provisions of these rules the term "the deposit fund" means the money
deposited or the stocks, funds, securities, or Exchequer bills transferred or deposited, as the case may
be, and the term " the depositors " means the co. or persons named in the warrant of the Board of
Trade authorizing the deposit, or the majority of survivors of those persons, their executors,
administrators, or assigns.

6. The Court shall, on the application of the depositors, order the deposit fund to be paid, trans-
ferred, or delivered out to the applicants, or as they direct, so soon as it is proved to the satisfaction
of the Court that the life assu. fund of the co., in respect of which the deposit is made, accumulated
out of prems. paid to the said co. amounts to the sum of ;£'40,ooo.

7. The depositors shall be entitled to receive payment of the int. or dividends from time to time
accruing on or in respect of the deposit while in court. And the Court may, from time to time, on the
application of the depositors, make such order as may seem fit respecting the payment of the interest
or dividends accordingly.

8. The issuing in any case of any warrant or certificate relating to deposit or to the deposit fund, or
any error in any such warrant or certificate, or in relation thereto, shall not make the Board of Trade,
or the person signing the warrant or certificate on their behalf, in any manner liable for or in respect
of the deposit fund, or the interest or dividends accruing on the same, or any part thereof respectively.

9. Any application under these rules to the Court of Chancery shall be made in a summary way by
petition. — w. R. Malcolm.

Board of Trade, 28th August, 1872.

The only Co., we believe, which has up to the present time made the deposit required
by the preceding Acts is the Continental of New York, on opening an agency in Lond.
during &e present year. It made the deposit, but within 48 hours it was repaid by an
order of the Court of Chancery — the ann. income of the Co. being over ;^40,ooo !
DEPOSIT Insurance. — Various attempts have been made to popularize Deposit Ins. in
Gt. Brit., but hitherto without success. The system is particularly simple in its details ;
and inasmuch as it involves no obligation for future ann. or other payments, avoids one of
the objections which is often urged against L. Ins. in the ordinary form. It is really a system
of single prem. ins., reduced so as to come within the range of everybody who may
desire its advantages. The plan of single prem. ins. has much to commend it, and it
seems remarkable that it has not come into more general use. We propose to review the
several schemes of Deposit Ins. which have been from time to time brought forward.

The Brit. Commercial^ 1820, appears to have been the first co. which introduced the
plan of Deposit Ins. in Gt. Brit. It furnished T. showing the amounts to be withdrawn
at given periods in relation to weekly deposits of is. 6d. ; or quarterly instalments of £2 l is. ,
or in return for £100 paid down. The co. did not continue this branch of its business.

In 1837 the Mutual Accommodation L. was founded; but its scheme can be hardly said
to fall within the scope of what is now understood by Deposit Ins.

In 1845 the United Deposit K^'syy. Co. was founded in Edin. Its chief feature was L.



Online LibraryCornelius WalfordThe insurance cyclopeadia: being a dictionary of the definitions of terms used in connexion with the theory and practice of insurance in all its branches: a biographical summary ... a bibliographical repertory of all works written upon the subject ... an historical treasury of events and circumstanc → online text (page 64 of 157)