The Business of Insurance (Volume 1); A Text Book and Reference Work Covering All Lines of Insurance, Written by Eighty Eminent Experts (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1912. Excerpt: ... Loss on non-participating. Could a fairer test of the respective merits of stock and mutual insurance be devised f It will be seen that during the first five years only was the non-participating policy the cheaper. The sixth year shows a small balance in favor of the participating contract, with a rapidly increasing gain in the next two years. This is the experience of two policies under precisely the same conditions from the beginning, with no conceivable reason to suppose that the participating contract has been especially favored. The net cost of the participating policy has grown less each year, and a steady decrease in cost during the remaining lifetime of the insured may be anticipated, assuming a continuance of the present superb management of the company and the prevalence of like conditions in the future. Shall Policyholders or Stockholders Controlf Leaving the question of cost, we pass to a discussion of the relative merits of mutual and stock control. It is superfluous to affirm that the entire assets of a mutual life insurance company, both reserves and surplus, belong exclusively to the policyholders. As much will be conceded as to the reserves of the stock company; and it is perhaps an open question whether even the surplus and all other funds of the company, not originally and directly contributed by the stockholders, do not in equity belong to the policyholders. It is certain that, aside from the comparatively small amount originally paid in by the stockholders in cash, the entire assets of a life insurance company have been derived from the premiums paid by the policyholders. The question is, then, should the policyholders be permitted to control their own funds, look after their own interests and manage their own affairs; or shall these ...