LIFE ASSURANCE.

Evening Star, Issue 3282, 27 August 1873, Page 3

LIFE ASSURANCE.

The success of the Government scheme of Life Assurance appears likely to induce what we may call bubble companies to start independent and speculative projects. This has actually been done to a considerable extent already in Victoria. Mr Vogel, referring to a criticism on the subject in a Melbourne paper, quoted the following reported utterance of a Legislative Councillor in that Colony :—“He gave the brief history of one of our Melbourne Insurance Companies, which he said was established in March, 1871, with business premises in the best part of Collins sheet, and a paid-up capital of L 914. During the time it lasted—-a period of eighteen months only—it issued forty-nine policies on well-selected lives, and had an annual income of L 229. At the end of eighteen months the assets had dwindled down to Ll5O, including the L 914 paid-up capital and premiums, although there had been no losses on the life fund. Alarmed at their position, the parties conducting the business immediately re-insured the whole of the lives, for which they paid LI 14, leaving L 36 to represent the paid-up capital and the premiums received during the eighteen months. This was not, according to the narrator’s account, an isolated case. He knew other Insurance Companies to be in a similar position, but did not! name them, as they were still carrying on business. One thing must strike everybody who exercises but a slight observation upon what is passing around him, namely, that we have in Melbourne about twice as many offices as are necessary to do all the life insurance business of the place ; and yet new offices have been started lately, holding out larger inducements to the public. ” To guard against this, Mr Vogel has introduced a Life Assurance Bill, which makes it necessary for all new companies to make a primary deposit of L5,0U0, and then, to guard the insurers further, all premiums, less twenty-fire per cent., are to be paid into the Government, until the sum of L 20.000 has been realised. This is a Canadian plan with this difference;, that in Canada the first deposit is L 20.000 instead of only L 5,000. The Bill proposes to make it essential that all companies, before commencing and while carrying on business, shall have a sufficient fund to meet probable contingencies, and also concedes the companies the benefit insurers in the Government Office possess, as to certain protection of policies from the operation of the Bankruptcy Act. . . . To provide, in

short, that the Government Ofh,ce shall not have any extra advantage other than that offered by thoroughly good security.