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Grey River Argus, Volume XII, Issue 1396, 21 January 1873, Page 2

It is a matter of great public importance to know that the Government is entertaining the idea of allowing Building Societies to accept life assurance policies as part security for the moneys advanced to their members. In order to secure this, correspondence has passed between a Mr Hawkins, the Secretary of the Union Permanent Building Society of Dunedin and the Hon. Mr Gisborne, copies of which have come to hand, and as the local Building Society may be considerably affected thereby, we give a short summary of the suggestions contained in the correspondence referred to :— " Mr Hawkins suggests that the operations of Permanent Building Societies especially afford a suitable means for extending the use of short time policies, and he illustrates his suggestions by an assumed case. The operation may be shortly described as follows : A borrower on applying for an advance from the Society makes a proposal for a life policy covering the amount proposed to be borrowed in favor of the Society , if the borrower dies before the repayment ef the money borrowed,* the Society receives the assurance money and reconveys the property mortgaged to the heirs of the deceased, together with such balance as may be represented by the money he had previously repaid. Mr Hawkins thus describes the process more particularly : — 'Mortgage for JIOO, re.payable by 60 monthly instalments, to cease in case the mortgagor shall not so long live. Mortgagor aged 40 next birthday. Dies after making 24th payment. Society would receive the policy money £100, and after deducting the redemption value of 36 payments, £77 10s, would pay to the heirs of mortgagor £22 10s, and grant to them a reconveyance of the property mortgaged." He also adds, " It will be obvious that the operation, while advantageous to the borrower, would in case of death be profitable to the Society ; but not more so than is fair and reasonable for the trouble and responsibility of attending to the payments, and for remunerating it for the loss of interest between the death of the mortgagor and payment of the insurance money. The redemption money*of such mortgage, without insurance, would be L 72 12s. The office asset would be LOB 35." Mr Gisborne, in his reply, "quite concurs in the desirability of the object in view," and will endeavor to facilitate its attainment. He states that he will "at once direct the preparation of tables for term policies from one to twelve years, for quarterly, half-yearly, and yearly premiums," and expresses a wish thatthe course he proposes to take should be made known to the various building Snfiififips.